PHILADELPHIA, Aug. 09, 2021 (GLOBE NEWSWIRE) -- Barrack, Rodos & Bacine announces that it is investigating possible breaches of fiduciary duty and securities law violations by the board of directors and officers of ATI Physical Therapy, Inc. (NYSE: ATIP) (“ATI” or the “Company”).
On February 22, 2021, Fortress Value Acquisition Corp. II, a special purpose acquisition company (or SPAC), issued a press release announcing that it had entered into a merger agreement with ATI. In an accompanying investor slide deck detailing the merger, ATI was forecasted to achieve $731 million in revenues and $119 million in adjusted EBITDA in 2021. Approximately three months later, on May 14, 2021, Fortress filed the deal’s definitive proxy statement, which contained the same 2021 forecasts. On June 15, 2021, Fortress shareholders approved the deal.
On July 26, 2021, ATI reported its financial results for the second quarter of 2021. ATI management said therapist attrition combined with a competitive hiring market for therapists had negatively impacted the business. As a result, ATI lowered its full year 2021 revenue guidance to $640 million - $670 million and adjusted EBITDA to $60 million - $70 million, which is significantly below what ATI said just two months earlier. In addition, ATI said it would only open 55 - 65 clinics in 2021 instead of 90.
In addition to this bad news, ATI’s earning statement was missing fundamental information about the Company. The Company stated that while it was able to calculate its pre-tax loss for the quarter ($5.5 million), ATI was unable to calculate its net loss, because "we are not yet able to calculate income tax expense without unreasonable efforts." In a report on the earnings statement, Barrington Research pointed out, “The release also lacked a share count, a balance sheet, a cash flow statement or, for that matter, a good defense for why the company’s original guidance (which was officially maintained up until yesterday) ever made sense….” “We are shocked by what has unfolded at ATI.”
Following this news, ATI’s shares fell over 43% and closed at $4.72 per share on July 26, 2021.
Holders of ATI stock are encouraged to contact Michael Toomey or Jeffrey Gittleman of Barrack Rodos & Bacine, at the following toll-free number: 877-386-3304, or via e-mail to mtoomey@barrack.com or jgittleman@barrack.com.
Philadelphia-based Barrack Rodos & Bacine has more than four decades of experience prosecuting securities law class actions, including cases involving accounting fraud, and has achieved some of the largest recoveries in the history of such litigation.
